Apple Watch shipments in Q3 estimated at 3.9M units, including 800,000 Series 3 with LTE

Apple has regained its position as the biggest producer of wearable devices in the world, analytics firm Canalys claims, with the release of the Apple Watch Series 3 and the cellular model said to help overtake Xiaomi in the third quarter, despite a small contraction in the marketplace.

According to Canalys's data, Apple shipped 3.9 million units of the Apple Watch in the third quarter of 2017, giving it a 23 percent market share. Out of the 3.9 million shipped units, the standalone Apple Watch Series 3 GPS + Cellular model contributed approximately 800,000 units to Apple's total.

Apple does not provide sales figures for its wearable devices, but did reveal doing its Q4 results call that its wearable business, including Apple Watch, AirPods, and Beats products, was up 75 percent year-over-year for the quarter, making it the size of a Fortune 400 company. For the Apple Watch specifically, CEO Tim Cook did note Apple Watch sales were up 50 percent compared to the June quarter, declaring it to be the world's best-selling wearable device.

"Strong demand for the LTE-enabled Apple Watch Series 3 has dispelled service providers' doubts about the cellular smartwatch not appealing to customers," said Canalys analyst Jason Low. The Apple Watch Series 3 apparently did not reach its full potential in the quarter, with Low suggesting it suffered "limited availability" as demand outstripped supply in some major markets, with some service providers apparently underestimating demand for the new model.

"In China, customers with high expectations are being driven away by the service disruption fiasco in the country," advises Low, warning operators they should work on "improving their remote service provisioning systems to cater for the expected higher demand in Q4."

Closest rival Xiaomi and third-place Fitbit followed behind with 3.6 million and 3.5 million shipments respectively, with the three firms reportedly beating the trend of a weaker third quarter by posting quarter-on-quarter growth. Huawei landed in fourth place in the rankings with 6 percent, while Samsung took fifth position with 5 percent of the market.

While Apple, Xiaomi, and Fitbit all increased their shipments, the waning demand for other bands of wearable devices is said to have caused some shrinkage in the market, dropping two percent to 17.3 million shipments in the quarter.

Research analyst Mo Jia notes that smartwatch producers like Apple continue to increase the value of their products "by prioritizing design and highlighting key features," while health continues to be a core focus. Highlighting Apple and Samsung's approach to brand loyalty by creating an ecosystem of devices and services, Jia also advises "smartphone vendors must reevaluate their respective smartwatch strategies to derive more value" beyond increasing smartphone sales.

The fourth quarter is expected to be stronger this year compared to 2016, with improvements to health tracking functions, longer battery life, and better designs across the market likely to boost sales. The quarter is also expected to be a barometer of consumer reactions to a new trend of fashion-focused smartwatches that prioritize the design over the functionality.

As for the Android Wear ecosystem, the Apple Watch's main competition, Low suggests "Google must show stronger commitment to help Android Wear vendors, which are now mostly watchmakers and fashion brands, to further improve the user experience and app ecosystem." If Google fails to do so, Low warns the market "will see further consolidation" with Apple, Samsung, and Fitbit dominating the market.

In this market, as in the smartphone market, I fail to see how unit comparisons have any meaning. And yet, such numbers continue to be summed up and exported. But it is interesting to hear estimates of Apple’s numbers; just not in comparison to products that cost a tenth as much.

I would hate to be the CEO of Fitbit. Sure you can capitalize on your brand for a while, but the writing is on the wall. General purpose wearables that are part of a larger ecosystem are going gain all the features of specialized devices over the next few years, leaving fitness-only devices with a niche market.

I would hate to be the CEO of Fitbit. Sure you can capitalize on your brand for a while, but the writing is on the wall. General purpose wearables that are part of a larger ecosystem are going gain all the features of specialized devices over the next few years, leaving fitness-only devices with a niche market.

I think FitBit is like the Blackberry of smartwatches. They had a nice early lead and held on for a while just like BlackBerry did with their smartphones and will slowly (maybe faster than slowly) see their brand swirl further and further down the toilet until its completely flushed. Sure, a Fitbit maybe smaller and cheaper, but for not that much more you can get an Apple Watch of some kind and it can do so much more and it has a great eco-system to go along with it that will be supported for years to come.

I would hate to be the CEO of Fitbit. Sure you can capitalize on your brand for a while, but the writing is on the wall. General purpose wearables that are part of a larger ecosystem are going gain all the features of specialized devices over the next few years, leaving fitness-only devices with a niche market.

I think FitBit is like the Blackberry of smartwatches. They had a nice early lead and held on for a while just like BlackBerry did with their smartphones and will slowly (maybe faster than slowly) see their brand swirl further and further down the toilet until its completely flushed. Sure, a Fitbit maybe smaller and cheaper, but for not that much more you can get an Apple Watch of some kind and it can do so much more and it has a great eco-system to go along with it that will be supported for years to come.

So far, that's how I'd compare FitBit. Both FitBit and Blackberry nee Research in Motion got a nice boost because of Apple but then they started to have massive drops. Their latest offering is trying to be more "smart" but the price seems too high to attract enough buyers in a world where the Apple Watch exists. I guess if you don't have an iPhone the new FitBit would be a good fit. I'm surprised to see that Apple is already besting them in unit numbers.

So customers really don't like the ugly red dot...not even 25% of sales.

False comparison, since it’s only available in red, there’s no choice if you want cellular. We’d have to see side by side numbers of red vs something else to make an honest assessment.

But you like red, we get it.

This is another choice...you don't get LTE and then you don't get the red dot which is what most customers chose. I wasn't saying people don't want LTE...I said they don't want the red dot.

I am not a fan of the red dot myself, but you are either ignorant or being disingenuous if you overlook the fact that this refers to Q3 (CY 2017) estimates, and the Series 3 was only on sale for 2 weeks in a 12 week quarter.

So customers really don't like the ugly red dot...not even 25% of sales.

False comparison, since it’s only available in red, there’s no choice if you want cellular. We’d have to see side by side numbers of red vs something else to make an honest assessment.

But you like red, we get it.

This is another choice...you don't get LTE and then you don't get the red dot which is what most customers chose. I wasn't saying people don't want LTE...I said they don't want the red dot.

I am not a fan of the red dot myself, but you are either ignorant or being disingenuous if you overlook the fact that this refers to Q3 (CY 2017) estimates, and the Series 3 was only on sale for 2 weeks in a 12 week quarter.

All signs point to a strong holiday season for Apple Watch. Lots of interest from new users due to LTE that I have read / heard, getting more favourable press coverage, and the lower price points of Series 1 (and non-cellular Series 3 which I plan to get). Supply isn't an issue.

Apple should pass 50M units sold by mid next year. Not too bad for a flop!

All signs point to a strong holiday season for Apple Watch. Lots of interest from new users due to LTE that I have read / heard, getting more favourable press coverage, and the lower price points of Series 1 (and non-cellular Series 3 which I plan to get). Supply isn't an issue.

Apple should pass 50M units sold by mid next year. Not too bad for a flop!

I think it will sell really well in the end. Just like with iPhone, it took a little bit but as Apple improves both the hardware and software I see Apple Watch continuing its lead over existing smartwatches and the popup competitors who wanted to try and cash in on an emerging market. Were already seeing some of the early smartwatches going away.

What will be interesting to see is how long Apple supports older watches. I have the original 42mm Apple Watch Sport and it'll be interesting to see how much longer watchOS is supported with the original Apple Watch. It would give me a good reason to upgrade though.